Yahoo! seems to believe that their hail mary pass to prop the company back up and return it to its golden days; is to complete an online ad partnership with Google. The only thing standing in Google’s way is the federal government’s antritrust regulators. Based on some of the details behind the partnership it seems these regulators may have reason to worry.

A Fortune article on the CNN website by Roger Parloff does a great job of detailing why federal regulators are so nervous about a Google and Yahoo! partnership. Concerns would include Yahoo! and Google having a combined 90% share of the paid-search market and Yahoo! effectively giving up the paid-search market to Google. A more obvious concern would be the two companies setting the price for search advertising which could be construed as price fixing outside of such a partnership.

I was a little on the fence about the Yahoo! and Google partnership, but after reading Parloff’s article I don’t see how federal regulators could approve such a deal. It would put way too much market share in Google’s hands. The federal government is already a little concerned about Google’s size anyway. I can’t see them approving a deal which would give them even more market share.